Higher maize production expected in India; US corn prices move up on Argentina drought situation; Higher SBM prices drag DDGS prices up; Ethanol futures down

The 2nd advanced agricultural production estimates were released this week by GOI and the corn production in India is estimated at 27.14 MMT (19.51 MMT in Khariff and 7.63 MMT in Rabi), up 4.78%. Prices remain stable or downward in the SPOT market. Price in Erode were indicated at Rs.13350/MT down 0.46% and in Gulabbagh Rs.11925/MT down 3.05%.

US corn futures moved up 3% this week, adding $4/MT over the last week’s close. Mar futures closed $148.5/MT; May $151.64% up 2.88%; May $154.48/MT up 2.67% and Sep $156.53/MT up 2.16%. The prices are up as Argentina drought situation has worsened and is likely going to affect the corn crop more drastically than thought before. Brazilian corn production is also likely to get affected as there will be a likely delay in soybean harvest and effect the second corn crop. Higher futures prices have lead to higher FOB prices of US corn, which added $10/MT against last week’s indicative prices. US Gulf $183/MT for Mar and $181/MT May. Indicated prices for PMW (FOB) were also higher at $185/MT (Mar) and $186/MT (May). Sorghum prices did not move up so much and added $3/MT on FOB basis and US Gulf prices was indicated at $204/MT.

Even though the world prices are moving up, it is yet to be seen if Indian prices will come down enough to be competitive for export in the South East Asian region.

With USSBM prices moving up 5% on CBOT and were indicated at $394/MT, against last week’s $375/MT. Higher SBM prices is moving other plant protein prices up and domestic usage of DDGS is going up as it fits well in the feed rations. FOB prices (US Gulf) were indicated at $222/MT for Mar and somewhat lower at $216/MT for May delivery. Prices for DDGS (rail delivered) to PMW were also up and indicated at $233/MT (Mar) and down slightly for May at $229/MT. CGM prices have moved up and indicated at $590/MT (FOB US Gulf). US DDGS delivered to Vietnam is up at $248/MT; China stable at $240/MT; Chittagong up at $270/MT and Myanmar at $266/MT (The FOB prices indicated above are for Bulk, while the delivered prices are for container loads).

US ethanol futures this week were down. Mar down 0.88% to $0.3857/Lit; Apr down 0.81% to $0.3894/Lit; May down 0.67% to $0.3915/Lit and Jun down 0.54% to $0.3915/Lit.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: asachdev@grains.org

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